Narrowing Down the Site Selection Choices - What Franchisees Need to Know to Determine the Best Location for Their Business

Comparing apples to apples can seem easy enough; however, the task may become increasingly difficult for franchisees doing site selection. Just imagine, you have located two prime locations for your franchise … both have many advantages. How do you choose which is better for your business?

As The Lease Coach, we have represented franchise and independent tenants with leasing matters since 1993 and are frequently faced with such decisions. Typically, we respond with first commending the franchisee for bringing forth two or more location options. This means that the franchisee has been doing his/her site selection homework properly by viewing multiple sites and not simply jumping at the first location available. When you “shop around” for possible locations, you can, in fact, collect written quotes from commercial landlords and use these as leverage when conducting lease negotiations. We then base our choice on a number of criteria; several of these are summarized below. Keep these points front and center when conducting your own site selection:

Premise Size: Is the desired unit too big or too small for your needs? If it is too large, you will be paying increased rent unnecessarily. If it is too small, you may find yourself suffering from claustrophobia as well as facing difficulty operating within the confines of this space when you expand.

Premise Shape: A square or rectangular-shaped unit, with sufficient frontage, is ideal. Is there any wasted space? We remember a former client who owned a tailoring shop. Not only was the space far too large for his needs, it also featured a long narrow hallway, which was, essentially, wasted space. Pillars inside the unit are another example of wasted space; while these do provide structural support, they cannot be moved to provide the most leasable area.

Premise Location: The old adage of location, location, location is absolutely right. You’ll want to look at both pedestrian and traffic flow. As well, consider the location within the location. A second floor retail unit in a shopping mall is less desirable than one on the main floor. Commercial retail units (CRUs) situated at the end of access corridors are also not ideal.

Premise Neighbours: Who is doing business next door to you? Will they attract customers to you or will they be a detriment to your own operation? On this subject, also look at the anchor tenant(s) and their stability. Anchors attract many customers to a property, so you will want to ask your leasing agent if the anchor tenant will be moving out soon and when. Tenants in a small strip mall located near one of our homes were caught unawares when a large grocery store (the anchor) moved out. This large grocer continued to pay the rent, thereby eliminating any chance of a competitor moving in to the vacant space.

Premise Storage: Does the space offer ample storage space for stocked inventory? A separate storeroom will serve you well to keep unopened boxes of stock until you and/or your staff can get to them.

Premise Visibility: Can your store (and signage) be seen clearly by passersby? Large trees, for example, can easily block a customer’s view. Also ask yourself if there are other buildings in the way or if there is even potential for new commercial properties being built in the area (there may be an empty field directly next door to your preferred site; however, the landlord may have plans to develop on that site). CRUs located at the rear of properties are also not immediately visible.

Premise Access: If your franchise is located within a shopping mall or plaza, it may be possible that you will conduct business outside of regular mall hours. A restaurant, for example, may remain open during holidays while the mall might be closed. In this case, ensure that your customers can gain entry through an outside door.

Premise Parking: Parking has got to be one of the most contentious issues for tenants. You will want an ample number of spaces conveniently located near your front door. Consider covered parking to protect those coming to your store from inclement weather as well as securing parking for both your customers and your staff.

As you can see, there are many considerations to evaluate when finalizing your site selection process. Choose carefully, as the most difficult business decision to change after opening is your business location. At the end of the day, when deciding between two comparable units, we may well choose the more expensive space if we deem this as more advantageous. Our job, after all, is to help the franchisee’s business grow and profit.

Dale Willerton and Jeff Grandfield - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com or visit www.TheLeaseCoach.com.

About Dale Willerton and Jeff Grandfield

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Dale Willerton and Jeff Grandfield - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013).